The 5-Minute Cash Flow Health Check
A simple framework to understand the financial heartbeat of your business.
Most business owners don't have a cash flow problem — they have a cash flow visibility problem.
Revenue might look strong. Your P&L might even show a profit. But if payroll feels tight… if vendor bills stack up… if you’re guessing whether you can afford to hire… then cash flow — not profit — is what’s really calling the shots.
Cash flow is the heartbeat of your business. When it's strong and steady, everything else has room to thrive. When it's erratic, even profitable companies can flatline.
The good news? You can understand your cash flow health in just a few minutes using a simple, CFO-level snapshot.
This is the same fast diagnostic we use at Lunch Money CFO to assess the financial stability of a new client in our first conversation.
Let’s walk through it.
See content credentials
1. Cash In vs. Cash Out Trend (The Pulse Check)
Look at the last 8–12 weeks. No ratios. No spreadsheets. Just two numbers:
Cash In (actual deposits)
Cash Out (actual payments)
Ask: Is the trend stable, rising, or falling?
If cash out consistently outruns cash in — even slightly — your business is running a quiet deficit. Most owners don’t notice this until it becomes a crisis.
🟢 Healthy
Cash in exceeds cash out more weeks than not.
🟡 Watch
An up-and-down pattern with no trend.
🔴 Warning
Outflows exceeding inflows 3+ weeks in a row.
A healthy business has a steady pulse. Cash in, cash out, predictable rhythm. When that rhythm breaks, everything else follows.
2. Your Real Monthly Burn Rate (The Reality Check)
Take the average of the last 3 months of cash outflows.
This is your true burn, not what your P&L says.
Most leaders underestimate this number by 20–40%.
Knowing your real burn rate makes every decision clearer:
Can you hire?
Can you invest?
Do you need a pricing adjustment?
Can you sleep at night?
🟢 Healthy
You know the number and can state it confidently.
🔴 Warning
You haven’t looked at this since last tax season.
3. Your Cash Runway (The Breathing Room Check)
Take:
Cash on hand ÷ Monthly burn rate = Runway (in months)
This tells you how much time you have before decisions become urgent.
4–6+ months: Strong
2–3 months: Manageable but tight
< 2 months: You are operating inside the "stress zone"
< 1 month: Decisions are being made emotionally, not strategically
Runway is the difference between leading confidently and reacting constantly.
4. Concentration Risk (The Dependency Check)
Look at your revenue sources.
If losing one client or one channel drops your revenue by 20%+, that’s concentration risk.
Even profitable businesses collapse from this.
A CFO sees this coming long before the books show trouble.
🟢 Healthy
No single client > 15% of total revenue
🟡 Warning
One client > 25%
🔴 Critical
One client > 35%
5. Upcoming Spikes (The “Future Punch” Check)
Most cash flow surprises are predictable — they just aren’t surfaced.
Scan the next 90 days for any of the following:
Annual software renewals
Tax payments
Insurance premiums
Large inventory buys
Planned hires
One-time contractor projects
If you can list these quickly, you’re ahead of 90% of owners. If not, these are the expenses that suddenly “come out of nowhere.”
What Your 5-Minute Checkup Tells You
By now, you should have a quick sense of whether your business is:
🟢 Healthy
You have stability, visibility, and a margin of safety.
🟡 Tense
Cash moves — but unpredictably. You’re leading from instinct, not insight.
🔴 At Risk
Runway is shrinking, decisions feel pressured, and you’re unsure what comes next.
No judgment — most businesses are in the yellow or red. Because cash flow isn’t about math. It’s about awareness.
If This Felt Clarifying… That’s What We Do.
At Lunch Money CFO, we help owners move from:
guessing → knowing
reacting → planning
stress → clarity
chaos → calm
If you want a deeper breakdown of your own cash flow health, we’re happy to walk you through this framework live.
